Navarro’s Tiff With the Wall Street Journal Boils Over

(Bloomberg) --

Trump administration officials have regular scuffles with newspapers, but rarer are fights over economics with the Wall Street Journal editorial page.

So it’s noteworthy that Peter Navarro, President Donald Trump’s leading China hawk on trade matters, has found himself in a public tiff with the leading U.S. business paper over tariffs on Chinese imports.

Last week, the Wall Street Journal editorial board published an article titled “A Navarro Recession?” and criticized what it called the “Trump-Navarro trade-policy slowdown.” It warned that the administration’s approach risked dragging the world economy into a recession, calling on the president to call a truce with Beijing.

Navarro used an interview on Fox Business Network to hit back at the paper, saying the longtime voice of capitalism sounded like the People’s Daily, the Chinese Communist Party’s flagship mouthpiece.

Both the Journal and Fox television are controlled by Rupert Murdoch and his family, who have been supportive of Republicans.

The Wall Street Journal’s editorial board has backed many of the Trump administration’s economic policies, applauding tax cuts and deregulation. However, the paper’s support for free trade has been at odds with Trump’s protectionism, and it’s pointed to Navarro as chief instigator.

Navarro didn’t immediately respond to request for comment.

On Wednesday a spate of bad economic news sent a shiver through global markets. Germany announced a second-quarter contraction, partly blamed by some analysts on the U.S.-China trade war. The U.S. and U.K. bond markets signaled a recession, with the yield on 10-year U.S. Treasury bonds dipping below 2-year bonds, a state called “inversion.” The Dow Jones Industrial Average sank 3%, its biggest drop of the year.

Finger-Pointing

Both Trump and Navarro spent time out of their day Wednesday blaming the Federal Reserve, criticizing its decision to raise interest rates last year.

The Wall Street Journal took a different tack, publishing another broadside titled “The Navarro Recession, II” and reiterating their concerns that the trade war was going to drag the world economy into a recession and telling Trump to change course. The piece invited Navarro to “comment again” on the warnings in the bond and equity markets, asking whether they were “Commies too?”

Navarro, who holds a Ph.D. from Harvard, views trade deficits as intrinsically bad for the American economy. He has also co-authored a book and an accompanying documentary titled “Death by China,” warning of China’s growing influence on the world economy.

The Trump administration announced on Tuesday that tariffs on many Chinese products, proposed in May, were to be either delayed or scrapped. Some analysts saw that move as America backing down, with Brad Setser, a senior fellow at the Council on Foreign Relations, telling Bloomberg TV that it was a “blink” by Trump.

Navarro described the decision as “strong and flexible” in an interview with Fox Business.

--With assistance from Jenny Leonard.

To contact the reporter on this story: Eddie Spence in London at espence11@bloomberg.net

To contact the editors responsible for this story: Tom Contiliano at tcontiliano@bloomberg.net, Brendan Murray, Sarah McGregor

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